Depending on how customers are left to feel with regards to cancellations, postponements, and refunds your business could face certain death if navigated poorly. As an attorney seasoned in high stakes deal making here is a guide based on strategies I use in daily negotiations to best leverage business report with customers and land on terms that keep your business afloat amid the Coronavirus crisis.
1. Information Gather & Set The Tone
The first step to positioning yourself for success is to information gather and set a tone of compassion. As a number of businesses have already sent multiple emails regarding the steps they are taking during this crisis if you have not already done so, now is the time. Following this first step will equip you to avoid potential business disasters based on a blind guess or assumption. In a simple email to your customers you can sympathize with the hardships we are all experiencing and gather information on customer expectations.
By gathering the information necessary to determine next best steps you have simultaneously set the tone for your business as sympathetic and human in a time of fear. Should you ultimately need to cancel, postpone, or refund people will forget what you said but always remember how you made them feel. Bottom line leave the feeling heard and that your brand is human.
2. Be Clear on the Options Available
A true negotiator explores and utilizes all options available to forge the best path possible and money is not always the bottom line for customers. Understand clearly what the impact will be on the life of your business should you issue any number of refunds, postpone, or cancel. Take the time to crunch the numbers, look at your policies, and know the terms of your vendor agreements so your bottom line is clear on what you can realistically agree to under the circumstances. Leading with compassion for customers while keeping your business afloat may take any combination of the following options.
Consider Refunds When: There is no other viable option for your business such as extending services for additional months, offering a perk or additional upgrade, postponing to a later date. Know in advance how many refunds your business can afford to dole out and consider determining conditions surrounding refunds that rule out the viable options listed such as perks and upgrades.
Consider Postponing When: Your ability to deliver your product/consumer as promised can actually occur in the future at an excellent level . This requires you to coordinate with any third party vendors, suppliers, or contractors to communicate with confidence to your customers that what they are expecting will happen and as expected.
Consider Canceling When: What you were offering was time sensitive or now impossible to deliver due to government regulations and shut downs. Should you need to cancel and must navigate deposits already paid out to vendor or suppliers; look in your agreements with them for a “force majeure” clause. A Force Majeure clause is normally towards the very end of a contract and states that if due to government shut down or regulation the terms of the contract will be deemed either impossible or postponed until reasonably possible. The key will be noting if the provisions allow for a complete termination, require a return of any deposits paid, or include any other terms as it relates to written notice, or wrapping up business in the event of the unforeseen such as COVID19. Knowing what is in your contracts could be the key to getting hundred if not thousands of dollars in deposits back to your business in the event of a force majeure termination.
At the end of the day this is hard on everyone. While you don’t want to sacrifice your business and all you’ve put into it; you also don’t want to miss an opportunity to meet at the table so that everyone can win including your customers. Reasonably consider if there is a middle ground that can be struck between what your established policies are, what the customer is requesting, and what you need to do to stay afloat. Lastly, don’t be afraid to reach out to professionals (such as lawyers, crisis managers, public relations teams) to get expert advice on navigating this murky territory.